New CMS Civil Monetary Penalty Rules Require LTC Facilities to "Pay First and Appeal Later"

Last week CMS published new federal regulations for nursing homes that will significantly change the way the government imposes and collects civil monetary penalties (“CMPs”). The regulations implement changes first mandated by Section 6111 of the health care reform law and become effective on January 1, 2012. Some of the key provisions of the regulations include:

• Mandatory Upfront Payment of CMPs. Currently facilities may appeal a CMP imposition of remedies notice and need not pay the CMP until after all administrative appeals have been exhausted. Under the new regulations, facilities must pay the CMPs before the appeal is finally resolved and within certain specific deadlines.

CMS will hold all CMPs in an escrow account pending the facility's appeal. If the facility wins the appeal, CMS will return the CMP to the provider with interest once the decision is final. Additionally, CMS may extend the time period for payments of the CMP into escrow if it finds immediate payment would create a “substantial and undue financial hardship on the facility.” If the facility does not timely pay the disputed CMP into escrow after receiving a demand, CMS may setoff the CMP amount from sums later due the facility.

• CMPs Reduced 50% For Self-Reporting and Correction of Deficiencies. The new regulations also encourage facilities to self-report deficiencies by giving a 50% CMP reduction incentive if certain conditions are met. This reduction does not apply to Intermediate Jeopardy tags or non-compliance showing a pattern of harm, widespread harm to residents, or non-compliance resulting in a resident’s death. Additionally, the 50% reduction is not available for any deficiency existing in a previous survey.

To qualify for the 50% reduction, the facility must:

• Self-report the non-compliance to the State or CMS before it is identified by surveyors or before the government receives a complaint.
• Correct the deficiency within a certain number of days of identifying the non-compliance or when the CMP is imposed.
• Waive its right to a hearing regarding the deficiency and penalty.

• Opportunity for Independent IDR Process. If CMPs are assessed and are eligible for payment to the escrow fund, the facility has the opportunity to request a new “independent” IDR process. This IDR is a new alternative to the current State IDR process. CMS calls this IDR “independent” because it would be run by a separate State agency that must be approved by CMS.

CMS has announced additional guidance interpreting these regulations will soon be published in the State Operations Manual. Although these revised rules do not go into effect until January 1, 2012, facilities should prepare now for the significant changes this new long term care law will have on existing CMP appeals strategies. For additional information on these new regulations or other issues affecting Long Term Care facilities, please contact Mark Bina at mbina@kdlegal.com or 312-423-9305.

SNF Claims Incorrectly Denied

CMS announced that when the 2011 Annual Update of Healthcare Common Procedure Code System (HCPCS) Codes for Skilled Nursing Facility Consolidated Billing was implemented in January 2011, a few codes were not included in the claims processing system edits. A correction was implemented on Monday, March 14, 2011. Providers who submitted claims for these services before Monday, March 14, 2011 may have had claims incorrectly denied. Providers who believe they received an incorrect denial should contact their Medicare Carrier or Medicare Administrative Contractor to have the claims reopened and reprocessed. Claims submitted after March 14, 2011 should process correctly. For a copy of the CMS notice and a listing of the claims click here.

For additional information, please contact Lori McLaughlin at lmclaughlin@kdlegal.com or 219-227-6075.

Changes to Medicare Enrollment: New Fee Required

Beginning on March 25, 2011 the Centers for Medicare and Medicaid Services will require institutional providers who wish to receive reimbursement for Medicare services to pay a fee of $505 when they revalidate their Medicare enrollment, initially enroll in Medicare, or add a new practice locations to their Medicare enrollment. The fee was implemented under a final rule that was issued recently, and the exact fee amount was announced in a Notice published on March 23, 2011. This fee will be adjusted each year for inflation.

If you have any questions about the new Medicare enrollment fee, please contact Leigh Ann O'Neill at llauth@kdlegal.com or 317-238-6346.

Changes Coming to the Nursing Home Compare Website

CMS will soon be updating the Nursing Home Compare website on April 23, 2011 and on July 21, 2011. Section 6103 of the Affordable Care Act requires that a wide variety of new information be posted on Nursing Home Compare at different time intervals. On April 23, CMS will make three changes to Nursing Home Compare. The first change will be to add information to allow consumers to more directly file complaints about nursing homes with State Survey Agencies. CMS is also adding a standardized complaint form that consumers can use in cases where they prefer to submit a complaint by fax. The second change that will take place on April 23 is to add a more visible consumer rights section that clearly spells out resident and consumer rights and provides more information about courses of action that consumers can take if they feel that their rights are being violated. This section will also have information on how to choose a nursing home and the Long-Term Care Ombudsman program. In July 2011, CMS will make an additional change to Nursing Home Compare to display information for each nursing home about the number of substantiated complaints received and about the number of enforcement actions (specifically Civil Money Penalties and Denials of Payment for New Admissions) that have been levied.

Finally, in addition to changes mandated by the Affordable Care Act, on April 23 CMS will "freeze" quality measure data and the five star quality measure ratings currently on the website for a period of six months. Historically, CMS has updated quality measure data each quarter. However, new MDS 3.0 derived quality measure data are not yet available for display, so CMS will retain the current QM scores and star ratings until October 2011. CMS anticipates that new MDS 3.0 QM data will be available in early 2012. CMS is soliciting comments on these website changes. For a copy of the survey and certification letter, click here.

For questions or additional information, contact Lori McLaughlin at lmclaughlin@kdlegal.com or 219-227-6075.

Indiana FSSA Publishes Nursing Facility VBP (Phase III) Report

Indiana's Family and Social Services Administration (FSSA) is working on a VBP program and recently published a report on the initiative. The report is based on work by FSSA's Indiana Nursing Home Value Based Purchasing (VBP) Clinical Expert Panel. The FSSA panel was formed in early 2010 and included nursing facility resident advocates, industry representatives and other clinical stakeholders who met regularly through the year. As a result of the panel's work, 13 recommended domains have been identified and proposed to measure quality and permit nursing facilities eligibility for Medicaid incentive payments that would become available under a proposed Phase III program. The report can be accessed here.  

FSSA will continue its dialog with the IHCA and other long term care industry leaders to further refine the proposed domains and the parameters for the proposed Medicaid Phase III program which an eye toward implementation in 2012. IHCA will continue to monitor these developments and keep you advised. If you have questions, please contact Zach Cattell at (317) 616-9001 or zcattell@ihca.org.

Indiana QIS Survey Update

The Indiana State Department of Health (ISDH) has published the results from the six initial QIS surveys performed in Indiana to date. A copy of the results can be accessed here. In short, the F tags cited in these QIS surveys are very similar to those cited by ISDH during the 2010 survey process, however the number of tags cited in the QIS surveys have increased. To date, there have been no IJ citations. ISDH has also reported that two QIS survey teams have been completely trained and two more will begin training in May.

For additional information regarding the QIS survey process and its implementation here in Indiana, contact Zach Cattell at (317) 616-9001 or zcattell@ihca.org.

IHCA Partners With National Education Alliance to Improve Quality of Care

Between restrictive schedules and prohibitive costs, working nurses face many roadblocks to continuing their education. A partnership between the Indiana Health Care Association (IHCA) and the National Education Alliance (NEA) will give Indiana nurses the help they need to overcome those hurdles and advance within their profession.

Under the new partnership, the IHCA has secured the commitment of the NEA to provide a free NEA membership for all IHCA Members and a discount membership for non-IHCA members. Licensed Practical Nurses (LPNs) and unlicensed assistive personnel (UAP) working in IHCA member or non-member facilities will now be able to explore educational pathways to career advancement at an affordable cost through NEA degree programs, certificate programs, skill enhancement courses, and other exclusive member benefits.

“Access to high quality and affordable online classes through a nationally-recognized partner in the NEA will give nurses and other professionals the flexibility they need to complete their certification while maintaining the ability to work full-time,” said Scott Tittle, President of the IHCA.

As part of its member services and community outreach, the IHCA sponsors a variety of educational and training opportunities for IHCA Members and non-members alike to allow long term care professionals to advance their careers. This new initiative is also part of a broader effort to improve the quality of patient care by giving healthcare professionals the tools necessary to elevate their voice/contribution in the healthcare industry. Recognizing the direct correlation between education and the delivery of quality care, the IHCA continues to serve IHCA Members and Indiana communities through its advocacy efforts on behalf of long term care providers, consumers, and the workforce.

“We are honored to collaborate with Indiana Health Care Association to support the educational aspirations of healthcare employees working in member and non-member facilities,” said Josh Williams, SVP of Community Relations for the National Education Alliance.

For more on this partnership and discount available, click here.

About The National Education Alliance
The National Education Alliance is an advocacy group for adult learners. The National Education Alliance works with employers to advance their employees in the workforce and supports through providers and institutions that offer discounts, grants and unique educational offerings for the adult learner.